Commercial property owner deadbeats on the rise

[sdduuuude]

[quote=Arraya]Which, I would bet, is the reason strategic defaulters are of a dramatically higher percentage, in the upper socioeconomic strata. They are better as estimating these things and probably less prone to self-interested propaganda.[/quote]

I think the definition of “strategic default” is the reason why it is more common in “upper socioeconomic strata.”

To be a strategic default, you have to be able to afford paying the mortgage on an under-water property. Most in the lower strata are unable to do so, and thus their defaults are not considered “strategic.”

[sdduuuude]

[quote=davelj]CRE investors don’t stop paying simply because the price of the underlying collateral declines. They stop paying when the cash flow from the property declines to the extent that the debt can’t be serviced (which generally also coincides with a drop in the property’s value). [/quote]

For a residence, I consider “cash flow from the property” to be equal to what it would cost the owner to rent the same house. I see no difference.

You say the homeowners should use income from other resources to cover the mortgage on a property that is not longer servicing the debt based on equivalent rent.

Shouldn’t businesses then use revenue from other cash-flow positive properties, (or personal income in the case of individuals) to do the same – which is what you are saying with the REITs. Why is that different from any regular RE investor?

You are trying to split hairs and it isn’t making sense, as far as I can see.

[sdduuuude]

[quote=davelj]CRE investors don’t stop paying simply because the price of the underlying collateral declines. They stop paying when the cash flow from the property declines to the extent that the debt can’t be serviced (which generally also coincides with a drop in the property’s value). [/quote]

For a residence, I consider “cash flow from the property” to be equal to what it would cost the owner to rent the same house. I see no difference.

You say the homeowners should use income from other resources to cover the mortgage on a property that is not longer servicing the debt based on equivalent rent.

Shouldn’t businesses then use revenue from other cash-flow positive properties, (or personal income in the case of individuals) to do the same – which is what you are saying with the REITs. Why is that different from any regular RE investor?

You are trying to split hairs and it isn’t making sense, as far as I can see.

[sdduuuude]

[quote=davelj]CRE investors don’t stop paying simply because the price of the underlying collateral declines. They stop paying when the cash flow from the property declines to the extent that the debt can’t be serviced (which generally also coincides with a drop in the property’s value). [/quote]

For a residence, I consider “cash flow from the property” to be equal to what it would cost the owner to rent the same house. I see no difference.

You say the homeowners should use income from other resources to cover the mortgage on a property that is not longer servicing the debt based on equivalent rent.

Shouldn’t businesses then use revenue from other cash-flow positive properties, (or personal income in the case of individuals) to do the same – which is what you are saying with the REITs. Why is that different from any regular RE investor?

You are trying to split hairs and it isn’t making sense, as far as I can see.

[sdduuuude]

[quote=davelj]CRE investors don’t stop paying simply because the price of the underlying collateral declines. They stop paying when the cash flow from the property declines to the extent that the debt can’t be serviced (which generally also coincides with a drop in the property’s value). [/quote]

For a residence, I consider “cash flow from the property” to be equal to what it would cost the owner to rent the same house. I see no difference.

You say the homeowners should use income from other resources to cover the mortgage on a property that is not longer servicing the debt based on equivalent rent.

Shouldn’t businesses then use revenue from other cash-flow positive properties, (or personal income in the case of individuals) to do the same – which is what you are saying with the REITs. Why is that different from any regular RE investor?

You are trying to split hairs and it isn’t making sense, as far as I can see.

[sdduuuude]

[quote=davelj]CRE investors don’t stop paying simply because the price of the underlying collateral declines. They stop paying when the cash flow from the property declines to the extent that the debt can’t be serviced (which generally also coincides with a drop in the property’s value). [/quote]

For a residence, I consider “cash flow from the property” to be equal to what it would cost the owner to rent the same house. I see no difference.

You say the homeowners should use income from other resources to cover the mortgage on a property that is not longer servicing the debt based on equivalent rent.

Shouldn’t businesses then use revenue from other cash-flow positive properties, (or personal income in the case of individuals) to do the same – which is what you are saying with the REITs. Why is that different from any regular RE investor?

You are trying to split hairs and it isn’t making sense, as far as I can see.

[davelj]

[quote=sdduuuude][quote=davelj]CRE investors don’t stop paying simply because the price of the underlying collateral declines. They stop paying when the cash flow from the property declines to the extent that the debt can’t be serviced (which generally also coincides with a drop in the property’s value). [/quote]

For a residence, I consider “cash flow from the property” to be equal to what it would cost the owner to rent the same house. I see no difference.

You say the homeowners should use income from other resources to cover the mortgage on a property that is not longer servicing the debt based on equivalent rent.

Shouldn’t businesses then use revenue from other cash-flow positive properties, (or personal income in the case of individuals) to do the same – which is what you are saying with the REITs. Why is that different from any regular RE investor?

You are trying to split hairs and it isn’t making sense, as far as I can see.[/quote]

The difference is that the “regular” CRE investor is generally an LLC with multiple LLCs (for each property) beneath it, each with different LPs. So, the “regular” CRE investor – unlike a REIT – can’t really make the decision to carry the property with the cash flow from other properties. Apples and oranges; not splitting hairs.

[davelj]

[quote=sdduuuude][quote=davelj]CRE investors don’t stop paying simply because the price of the underlying collateral declines. They stop paying when the cash flow from the property declines to the extent that the debt can’t be serviced (which generally also coincides with a drop in the property’s value). [/quote]

For a residence, I consider “cash flow from the property” to be equal to what it would cost the owner to rent the same house. I see no difference.

You say the homeowners should use income from other resources to cover the mortgage on a property that is not longer servicing the debt based on equivalent rent.

Shouldn’t businesses then use revenue from other cash-flow positive properties, (or personal income in the case of individuals) to do the same – which is what you are saying with the REITs. Why is that different from any regular RE investor?

You are trying to split hairs and it isn’t making sense, as far as I can see.[/quote]

The difference is that the “regular” CRE investor is generally an LLC with multiple LLCs (for each property) beneath it, each with different LPs. So, the “regular” CRE investor – unlike a REIT – can’t really make the decision to carry the property with the cash flow from other properties. Apples and oranges; not splitting hairs.

[davelj]

[quote=sdduuuude][quote=davelj]CRE investors don’t stop paying simply because the price of the underlying collateral declines. They stop paying when the cash flow from the property declines to the extent that the debt can’t be serviced (which generally also coincides with a drop in the property’s value). [/quote]

For a residence, I consider “cash flow from the property” to be equal to what it would cost the owner to rent the same house. I see no difference.

You say the homeowners should use income from other resources to cover the mortgage on a property that is not longer servicing the debt based on equivalent rent.

Shouldn’t businesses then use revenue from other cash-flow positive properties, (or personal income in the case of individuals) to do the same – which is what you are saying with the REITs. Why is that different from any regular RE investor?

You are trying to split hairs and it isn’t making sense, as far as I can see.[/quote]

The difference is that the “regular” CRE investor is generally an LLC with multiple LLCs (for each property) beneath it, each with different LPs. So, the “regular” CRE investor – unlike a REIT – can’t really make the decision to carry the property with the cash flow from other properties. Apples and oranges; not splitting hairs.

[davelj]

[quote=sdduuuude][quote=davelj]CRE investors don’t stop paying simply because the price of the underlying collateral declines. They stop paying when the cash flow from the property declines to the extent that the debt can’t be serviced (which generally also coincides with a drop in the property’s value). [/quote]

For a residence, I consider “cash flow from the property” to be equal to what it would cost the owner to rent the same house. I see no difference.

You say the homeowners should use income from other resources to cover the mortgage on a property that is not longer servicing the debt based on equivalent rent.

Shouldn’t businesses then use revenue from other cash-flow positive properties, (or personal income in the case of individuals) to do the same – which is what you are saying with the REITs. Why is that different from any regular RE investor?

You are trying to split hairs and it isn’t making sense, as far as I can see.[/quote]

The difference is that the “regular” CRE investor is generally an LLC with multiple LLCs (for each property) beneath it, each with different LPs. So, the “regular” CRE investor – unlike a REIT – can’t really make the decision to carry the property with the cash flow from other properties. Apples and oranges; not splitting hairs.

[davelj]

[quote=sdduuuude][quote=davelj]CRE investors don’t stop paying simply because the price of the underlying collateral declines. They stop paying when the cash flow from the property declines to the extent that the debt can’t be serviced (which generally also coincides with a drop in the property’s value). [/quote]

For a residence, I consider “cash flow from the property” to be equal to what it would cost the owner to rent the same house. I see no difference.

You say the homeowners should use income from other resources to cover the mortgage on a property that is not longer servicing the debt based on equivalent rent.

Shouldn’t businesses then use revenue from other cash-flow positive properties, (or personal income in the case of individuals) to do the same – which is what you are saying with the REITs. Why is that different from any regular RE investor?

You are trying to split hairs and it isn’t making sense, as far as I can see.[/quote]

The difference is that the “regular” CRE investor is generally an LLC with multiple LLCs (for each property) beneath it, each with different LPs. So, the “regular” CRE investor – unlike a REIT – can’t really make the decision to carry the property with the cash flow from other properties. Apples and oranges; not splitting hairs.

[briansd1]

[quote=davelj]
The difference is that the “regular” CRE investor is generally an LLC with multiple LLCs (for each property) beneath it, each with different LPs. So, the “regular” CRE investor – unlike a REIT – can’t really make the decision to carry the property with the cash flow from other properties. Apples and oranges; not splitting hairs.[/quote]

Similarly in the family “business” if the husband won’t pay the bill anymore, the wife can’t make him. 😉 Each household member could be considered a separate LLC. 😉

[briansd1]

[quote=davelj]
The difference is that the “regular” CRE investor is generally an LLC with multiple LLCs (for each property) beneath it, each with different LPs. So, the “regular” CRE investor – unlike a REIT – can’t really make the decision to carry the property with the cash flow from other properties. Apples and oranges; not splitting hairs.[/quote]

Similarly in the family “business” if the husband won’t pay the bill anymore, the wife can’t make him. 😉 Each household member could be considered a separate LLC. 😉

[briansd1]

[quote=davelj]
The difference is that the “regular” CRE investor is generally an LLC with multiple LLCs (for each property) beneath it, each with different LPs. So, the “regular” CRE investor – unlike a REIT – can’t really make the decision to carry the property with the cash flow from other properties. Apples and oranges; not splitting hairs.[/quote]

Similarly in the family “business” if the husband won’t pay the bill anymore, the wife can’t make him. 😉 Each household member could be considered a separate LLC. 😉

[briansd1]

[quote=davelj]
The difference is that the “regular” CRE investor is generally an LLC with multiple LLCs (for each property) beneath it, each with different LPs. So, the “regular” CRE investor – unlike a REIT – can’t really make the decision to carry the property with the cash flow from other properties. Apples and oranges; not splitting hairs.[/quote]

Similarly in the family “business” if the husband won’t pay the bill anymore, the wife can’t make him. 😉 Each household member could be considered a separate LLC. 😉

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